The ABCs of VSA:

Distribution Part II

By Lauren Snedeker
 Todays Objectives
Recognize the middle sequence bar
Recognize market tops & relative volume
Determine collapse, rise, or sideways based on
the indicator and volume
Learn to be patient!
 Review from Part I
Distribution is also known as the
________phase by the Smart Money

Distribution is marked by two things:

1. ____________________
2. ____________________
 Review from Part I
Distribution is also known as the Selling phase
by the Smart Money

Distribution is marked by two things:

1. Ultra High Volume
2. Ultra Wide Spread
 Using Gavins second book
10 Sequences for Shorting include these
Middle Signals:

Upthrust
No Demand
Supply Coming In (not as common)
 The Upthrust
Most common middle signal
You have weakness behind you
You approach an old top and close on the low
The bar should have a higher high than the
bar(s) behind it
Closes on the low (looks like an L)
Next bar should close down
Upthrust on High Volume
UpThrust on Moderate Volume
No Demand near Market Top
Approaches an old
top
Far less volume
Sideways
movement before
Next bar closes
down
Gaps back down to
Climactic Action
area
 Supply Coming In
A True Breakout: breaks through an old top on
High Volume and will be tested within 2 bars
ideally

A False Breakout: (in this case) is a Serious

SOW the more supply present the greater
the future drag on prices and the need for
testing of that supply
Supply Coming In - SOW
 Middle Sequences
They are not confirmation signals the market
is going to fall
They are alerting you to exit your long position
They are alerting you to watch the volume
They are alerting you to look at old tops
You need confirmation ALWAYS
 Putting it all together
The start of distribution in place
You approach an old top
You watch the volume
You determine how weak the market is
You wait for confirmation